7 must-know tips for successful offshore software development

Offshore software development is one of the best ways to cut development costs and can be a great choice for your business.

But, there’s a catch – getting it right isn’t easy.

And if you get it wrong, it will cost you even more in the long run.

With that in mind, we’ve compiled a list of must-know, practical tips you should follow for successful offshore software development.

Let’s dive in!

What is offshore software development?

We’ll start by quickly going over the basics – what exactly is offshore software development?

Offshore software development is when you outsource development to a company or team in a different country, specifically one that’s geographically far away from you.

So, if you’re a Silicon Valley startup and hire a team of developers from Croatia, that counts as offshoring.

It’s a huge market, too, projected to reach a value of $112.6 billion by 2030.

But, offshore development often gets a bad rap.

It isn’t just hiring a couple of cheap, low quality developers to spit out subpar code.

Instead, it’s about outsourcing development to skilled engineers from a huge, worldwide talent pool to meet your specific needs.

And there are plenty of outsourcing models to choose from, like:

• Full project outsourcing – the offshore team handles the entire software development process from start to finish, from gathering requirements all the way through to post-launch maintenance and support
• Dedicated team – a team of engineers that works just like an in-house team and works exclusively for you on long-term projects
• Extended team – a team of engineers you hire to augment your in-house team on specific projects or to address skill gaps

So, there’s a lot of different ways you can offshore development.

And if you do it right, you’ll significantly cut development costs without sacrificing quality – we’ll show you how to do that next.

Top tips for successful offshore software development

Next, we’ll discuss the top tips you should follow for successful offshore development.

Choose the right offshore software development company

We’ll start with by far the most important tip for successful offshore development – you need to choose the right company to partner with.

Partnering with the wrong company can lead to unnecessary delays, budget overruns, and poor software quality.

But, choosing the right partner will help you cut development costs without sacrificing quality.

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So, how do you make the right choice?

Here’s what you should do:

• Clearly define your goals and requirements
• Read their case studies
• Check their reviews
• Review their development process
• Evaluate their tech stack
• Review their pricing

Of course, this is just the process. And it will only help you narrow down the list of compatible companies.

To really make the right decision, you need to make sure the company has these traits:

• Transparent and accurate communication
• Flexibility and proactivity
• Work ethic and cultural compatibility

You want a partner that’s flexible and proactive during development and takes ownership of the project just like an in-house team would.

And you want them to take their work seriously and “get” your company culture.

But, the most important trait is transparent and accurate communication, by a mile – we’ll discuss it in more detail a bit later.

In short, you want a partner that adds value and doesn’t just churn out mediocre code.

And that’s why picking the right company is so important.

Set clear goals at the start

Ambiguity is the enemy in software development.

It will lead to misaligned expectations and can derail even the simplest project.

And that’s why setting clear goals and writing clear requirements at the start of collaboration is absolutely essential.

So, before any code is written, you need to define:

• Project goals
• Project scope
• Deliverables
• Timelines and milestones
• Performance tracking metrics

The SMART goals framework is a good place to start.

Let’s say you’re building a customer relationship management (CRM) platform. Your SMART goal is “Launch a CRM platform” and here’s what that includes:

• Specific – Develop and deploy a CRM platform with core features, including lead tracking, email integration, and analytics dashboards.
• Measurable – Ensure the platform can support 500 concurrent users with 99.9% uptime during the first three months after launch.
• Achievable – Use offshore developers with CRM experience and existing cloud infrastructure to speed up development.
• Relevant – Support our goal to improve customer retention by 15% in the next fiscal year.
• Time-bound – Complete the development, testing, and deployment within six months.

Well-defined goals like this, as well as a defined scope, deliverables, and timelines will help keep the whole team on the same page.

Just make sure to thoroughly document these goals, share them with your offshore team, and update them if they change.

It’s the best way to lay a solid foundation for successful collaboration.

Encourage open communication

Open communication is key to the success of any software development project.

And that’s especially true for offshore software development.

Poor communication can kill your project before it even gets off the ground – and that will cost you a lot of money.

Plus, you won’t be able to take full advantage of the offshore team’s expertise and experience.

Here’s a quick explainer by DECODE co-founder and CEO, Marko Strizic, on how open communication benefits you during development:

Clear and open communication is the glue that can keep even the most complex projects on track. But, without it, the simplest projects can fall apart.

So, how do you ensure good communication with your offshore team?

The first step is establishing clear communication channels at the start of development.

Agree on tools like Slack, Teams, or Zoom that everyone on the team will use to discuss the project. And ensure all project-related communication stays on those platforms.

Also, make sure to use both asynchronous and synchronous communication methods.

source: Smartsheet

Also, don’t forget to write clear communication guidelines to proactively address any potential communication barriers.

Make sure the team can come to you and communicate if they’re facing any problems or blockers.

It’s the best way to ensure your project starts off on the right foot.

Regularly give feedback to your offshore team

Regular constructive feedback will help your offshore team continuously improve and keep the project on track.

So, make sure you have structured, formal processes for delivering feedback in place from the start – this can be something like scheduled review sessions and sprint retrospectives.

This way, you’ll ensure that feedback is consistent and the team has time to prepare.

Also, the feedback you give has to be actionable and constructive. Avoid vague comments and provide specific examples and suggestions.

But, you need to watch out for cultural differences when giving feedback, too.

This is important because 60% of outsourced projects fail because of bad cultural compatibility.

For example, if your offshore team is from a country with a less assertive style of communication, that will affect how they give feedback.

So, you need to take these cultural differences into account when giving feedback if you want it to actually work.

Also, don’t forget that feedback is a two-way street.

Your offshore team should feel comfortable giving feedback to their in-house counterparts, since this will help build trust and make for more effective collaboration.

And that’s exactly what you should want.

Synchronize work hours

Managing time zone differences is one of the biggest challenges in offshore software development.

Let’s say you’re based on the U.S. East Coast and hire a team from India. They’ll be 9 and a half hours ahead of you, so coordination will be difficult.

source: Time Temperature

If they’re not carefully managed, such time zone differences lead to communication delays and bottlenecks in development.

And your best bet is synchronizing work hours with your offshore team.

A good place to start is identifying and agreeing upon specific hours when both your in-house and offshore teams are available.

You should schedule all important meetings, like daily-stand ups and sprint planning meetings, during those overlapping hours.

It’s a good idea to encourage flexible scheduling to increase the overlap with your offshore team.

Also, asynchronous communication tools and methods will be your best friend here – make sure you’re diligent about updating the team before they start work for the day.

Ensure data security

Ensuring data security in offshore software development is key, especially since you’ll be sharing sensitive business information with a third party.

Here’s a couple of eye-watering statistics to prove that point.

In 2024, the average cost of a data breach reached its highest total ever – $4.88 million, 10% higher than in 2023.

That’s just the financial damage. Severe reputational damage is the real danger, with 60% of companies that suffer a severe data breach end up going out of business.

And partnering with any third-party increases the risk of data breached. So, how do you avoid that from happening to you?

The first step is doing your due diligence before choosing an offshore development partner.

Make sure they comply with international security standards like ISO/IEC 27001.

source: Kolide

A reputable company will have robust measures like these in place to protect sensitive information.

Also, make sure you have clear data handling policies in place and that the offshore team understands and sticks to them.

On top of that, you need to verify that your offshore partner complies with data protection laws like GDPR or CCPA to avoid potential fines.

Finally, you should invest in regular security audits to stay on top of vulnerabilities and ensure compliance with security policies.

Proactive monitoring will help you detect potential breaches and issues early, before they cause irreparable damage.

And that’s the best way to keep your data safe and secure.

Set up project management processes

Robust project management processes are essential for the success of offshore software development projects. 

They provide structure, improve communication, and ensure the project is delivered on time and within budget.

Here’s a few statistics that show why project management is so important:

source: Kissflow

Poor project management will cost you money, prevent you from reaching your goals, and will cause high scope creep. In short, it will cause your project to fail.

So, how do you set up project management processes?

First, you need to clearly define roles and their responsibilities to prevent overlaps and confusion about who does what.

Of course, you need a dedicated project manager on the team to make all of this happen.

They’ll be the primary point of contact for the whole project and will be in charge of overseeing progress, solving issues, and coordinating the whole team.

Then, you need to make sure your offshore team uses a defined Agile development methodology like Scrum or Kanban.

Agile methodologies promote flexibility, iterative progress, and continuous feedback, which are key to successfully managing offshore teams.

Also, you should to invest in project management tools like:

• Jira
• Trello
• Asana
• ClickUp

They’ll help you effectively track tasks, task progress, manage deadlines, and make sure everyone is always on the same page.

And that’s key to success.

Offshore software development tips: FAQs

Looking for a reliable offshore development partner?

Are you looking for a reliable offshore development partner but can’t seem to find a company that’s the right fit?

Well, you’re in the right place.

We’re a high-caliber, full-service software development company and we can help you build your product from the ground up.

And we don’t stop there – we’ll help you iterate and grow it, too.

If you want to learn more, feel free to reach out and our team will get back to you as soon as possible to discuss your needs in more detail.